CNN managed to get the attention of California’s insurance regulator Dave Jones over a bombshell admission in a suit against Aetna over the denial of care.1 From a videotaped deposition, as summarized in MedCity News Aetna’s former medical director Dr. Jay Ken Iinuma, whose job was to review whether to authorize payments:

He went on to admit he never looked at patients’ records at Aetna and instead relied on information provided by a nurse. Most of his work, he said, was found online. During any given month, Iinuma said he’d call a nurse “zero to one” times to gather more data.

Iinuma was a medical director at Aetna from 2012 to 2015. Commissioner Jones was so outraged over the testimony that he has not only opened up an investigation but is also soliciting information from other Aetna patients who believe they were treated improperly. The state insurance departmetn site urges “any Californians who are concerned that they might have been affected to contact the California Department of Insurance at 1-800-927-4357.” If you have trouble getting through, they also have a “File a Complaint” page.

“Oh my God. Are you serious? That is incredible,” said Dr. Anne-Marie Irani when told of the medical director’s testimony. Irani is a professor of pediatrics and internal medicine at the Children’s Hospital of Richmond at VCU and a former member of the American Board of Allergy and Immunology’s board of directors.

“This is potentially a huge, huge story and quite frankly may reshape how insurance functions,” said Dr. Andrew Murphy, who, like Irani, is a renowned fellow of the American Academy of Allergy, Asthma and Immunology. He recently served on the academy’s board of directors..

Dr. Arthur Caplan, founding director of the division of medical ethics at New York University Langone Medical Center, described Iinuma’s testimony as “a huge admission of fundamental immorality.”

“People desperate for care expect at least a fair review by the payer. This reeks of indifference to patients,” Caplan said…

Murphy, the former American Academy of Allergy Asthma and Immunology board member, said he was “shocked” and “flabbergasted” by the medical director’s admission.

“This is something that all of us have long suspected, but to actually have an Aetna medical director admit he hasn’t even looked at medical records, that’s not good,” …

“If he has not looked at medical records or engaged the prescribing physician in a conversation — and decisions were made without that input — then yeah, you’d have to question every single case he reviewed.”

Murphy said when he and other doctors seek a much-needed treatment for a patient, they expect the medical director of an insurance company to have considered every possible factor when deciding on the best option for care.

Even though it is tempting to jump to worst-case conclusions, we’ve seen too often in corporate scandals that that is precisely how things pan out. As famed short seller David Einhorn says, “No matter how bad you think it is, it’s worse.”

As the doctors’ comments above indicate, at a bare minimum, every decision made by Iinuma could be subject to sanctions by the State of California, and every denial of care made by him could be challenged by patients. But even as Aetna is taking the standard big company line of “We had procedures in place, nothing to see here,” at a bare minimum, there was a breakdown in controls, and a real possibility that Iinuma was merely an extreme version of a widely accepted practice of what amounted to doctor robosigning of nurse-at-best reviews.

Aetna’s Handwave Defense

Amusingly, Aetna’s initial response is to point to its policies. Its written comment to CNN:

We have yet to hear from Commissioner Jones but look forward to explaining our clinical review process.

Aetna medical directors are trained to review all available medical information — including medical records — to make an informed decision. As part of our review process, medical directors are provided all submitted medical records, and also receive a case synopsis and review performed by a nurse.

Medical directors — and all of our clinicians — take their duties and responsibilities as medical professionals incredibly seriously. Similar to most other clinical environments, our medical directors work collaboratively with our nurses who are involved in these cases and factor in their input as part of the decision-making process.

This is insulting to the intelligence, and does not speak well for Aetna either. They can’t deny what Iinuma said in his deposition. Yet it looks like they think they can even beat back what is sure to be their bare minimum level of exposure: that of facing a penalty for his decisions plus having all of his denials opened up to patient challenges. The much better posture from a PR perspective would be to throw Iinuma under the bus, for Aetna to say it was appalled at his statement and would investigate.

As anyone who has been in a large organization knows, formal policies often exist solely as a liability shield for senior management and mean bupiks in practice. The real rules of the road are codified in what behaviors are rewarded (what is paid and who gets promoted). Another signal is goals and metrics.

It’s not hard to see that Aetna’s passive “We give medical directors the patient records and the nurse-provided summary and recommendation” is a grotesque effort to pretend it has no institutional responsibility. It’s as if its medical directors just needed to sit through the training and then they were independent operators using Aetna-provided information.

Go back to Iinuma. At a bare minimum, he had to be processing a ton of cases as a result of his lack of review. Given how Corporate America is obsessed with costs, you can be sure it was tracking how many cases medical directors completed over some time frame, say daily or weekly.

So there are only two possibilities here, neither of them pretty:

1. There was no supervision of Iinuma, no higher-level check whatsoever on his volume and quality of review

2. Iinuma’s high volume output was exactly what Aetna wanted

Do you seriously believe 1, which appears to be what Aetna is trying to portray? Even if true, they can’t pretend that they are not ultimately responsible for what their employees do. This approach might limit the damage to Iinuma provided there aren’t other cases of medical directors not reviewing patient records. Aetna may hope the California insurance director doesn’t go on a wide-ranging investigation, and that other insurance directors don’t jump in. That seems pretty unlikely. At a minimum, New York State has a tough insurance bureau, and it’s not hard to imagine them opening an inquiry based on what unfolds in California.

It seems far more probable that Aetna had targets or incentives to reward medical directors for keeping approvals down as well as total output targets. Just like the mortgage servicing robosigners, medical directors like Iinuma may have been given so many cases to get done that there was no way to get through them without rubber stamping most of them. He may have been engaging in normal behavior, or not very far outside common practice.

The first step for Commissioner Jones is to demand Iinuma’s personnel reviews and those of his immediate boss. That will tell pretty clearly what behavior they really wanted from their medical directors.

Given Aetna’s ham-handed initial response, we might be in for a replay of a Wells-Fargo-esque effort to shift blame for top management setting goals that could be achieved only by fraud onto lower level “bad apples”. Stay tuned.

____

1 I’ve skipped over the underlying lawsuit because it winds up being ancillary to the deposition admission, plus the CNN summary has me wondering if more facts are needed to make sense of what happened.

The short version is plaintiff Gillen Washington is suing Aetna for breach of contract and bad faith. He was diagnosed with common variable immunodeficiency (CVID). Based on some web searches, it appears that the protocol for people diagnosed with CVID includes regular, from what I can infer, typically monthly intravenous immunoglobulin (IVIG) infusions, which are pricey. CNN says they cost up to $20,000 a treatment. The literature also makes clear, in a not-very-coded fashion, that life expectancy with CVID depends to a significant degree on how well the condition is managed.

Washington had been with Kaiser and then had his policy transferred to Aetna. After approving some IVIG treatments, Aetna then denied them. This is the part that is squirrel-y, from CNN:

But when Washington’s clinic asked Aetna to pre-authorize a November 2014 infusion, Aetna says it was obligated to review his medical record. That’s when it saw his last blood work had been done three years earlier for Kaiser.

Despite being told by his own doctor’s office that he needed to come in for new blood work, Washington failed to do so for several months until he got so sick he ended up in the hospital with a collapsed lung.

Once his blood was tested, Aetna resumed covering his infusions and pre-certified him for a year. Despite that, according to Aetna, Washington continued to miss infusions.

Washington’s suit counters that Aetna ignored his treating physician, who appealed on his behalf months before his hospitalization that the treatment was medically necessary “to prevent acute and long-term problems.”

“Aetna is blaming me for what happened,” Washington told CNN. “I’ll just be honest, it’s infuriating to me. I want Aetna to be made to change.”

Since I don’t have access to the filings, it may be that Washington filed his case and the material above comes from Aetna’s response, and Washington’s side has yet to reply to it (or that may come only in the trial phase). It would seem to make no sense for Washington not to have gotten a blood test, unless his doctor was arguing with Cigna that the annual blood tests weren’t medically necessary (as in CVID one of those conditions you never get over). This isn’t as crazy as it sounds in light of this admission by Iinuma:

During his videotaped deposition in October 2016, Iinuma — who signed the pre-authorization denial — said he never read Washington’s medical records and knew next to nothing about his disorder.

Questioned about Washington’s condition, Iinuma said he wasn’t sure what the drug of choice would be for people who suffer from his condition.

Iinuma further says he’s not sure what the symptoms are for the disorder or what might happen if treatment is suddenly stopped for a patient.

While it may be that Washington was a non-complaint patient, the tenor of his response suggests that he believes Aetna misrepresented what happened. He may be posturing for the press, but he presents himself as more interested in getting Aetna to shape up than getting monetary damages. He’s making a lot of progress on that front already. And if that is his aim, he would be more likely than most plaintiffs to go to court to expose Aetna’s conduct. So there are decent odds of getting a more detailed account of what went on with his case.

There is a tell in Aetna’s response: “all of our clinicians — take their duties and responsibilities as medical professionals incredibly seriously.” Yes, it is incredible, but perhaps that wasn’t the best diction for PR purposes.

Anyone who doesn’t see this as a textbook example of what happens when an entire industry is allowed to “police” itself isn’t looking or is involved in some way. ALL this nonsense it out the window when the healthcare of an entire country is government owned and operated. The entire dynamic is changed completely. Doctors are paid by how healthy their patients are. Bonuses are paid to the worker who figured out how to lower the cost of a procedure, or have it done at home. Drug companies are reigned in by the fact that they now deal with the only game in town, not how they can play one against the other. It’s gone on too long. The insurance companies are out of anyone’s control. This will continue to worsen until hospitals have the ability to throw patients out on the sidewalk ! Oh wait, they already do that. In the winter in their hospital clothing ! Enough is enough ! Medicare for all, N O W !!!

Years ago someone I worked with had left the Insurance business for what they said were moral reasons. I asked – do you mean the denying of claims that should be covered? They responded “Yes, we had the rule of 3”. The rule of 3 was that if the agent thought certain people would not challenge a denial they were denied coverage until they followed up three times. They also told me that the legitimate claims that were not paid were actually tracked and were used to calculate yearly bonuses.

I worked in the medical insurance business (claims) for 5+ years, and agree that routine denial is the default action, as well as putting the claim in a pending status for 30 days as a matter of course (so that the claim would not pay out).

I’m honestly surprised that an actual doctor pretends to review the claims. Ten years ago I was involved in writing a software package that would automate everything wrt claims processing. I would have thought it had gone live by now!

Wow, I sure hope this does have implications for how insurance is done!

Agree, the admission is more damning than the reported behavior of requiring a blood test and indeed authorizing treatment upon receiving it.

Although, I wouldn’t dismiss the nurses’ input. I rather think this is SOP based on my experience of doctors as a hospice social-worker: care is really nurse-driven. Not sure that’s a bad thing either: nurses KNOW their patients, at least the good ones do.

I would be interested to know what the percentages were on when he followed their recommendations or overruled them in denying care.

I rather think this is SOP based on my experience of doctors as a hospice social-worker: care is really nurse-driven. Not sure that’s a bad thing either: nurses KNOW their patients, at least the good ones do.

If this were a situation where the nurse was involved in the front-line care, I’d normally agree. They have more patient contact. But the situation here is a distant review process, right? Not front-line care, but reviewing case file data. So I don’t think we know what the nurse was actually doing in reviewing these files and then passing a recommendation to the physician.

Given the apparently perverse incentives facing the “non-reviewing” physician Iinuma in this case, I don’t think it’s safe to assume that the nurse was doing a competent job.

Huh? These are not “nurses who know their patients”. These are nurses reviewing records.

Nurses in real world settings have two reasons they can be particularly valuable: one is they often spend more time with the patient and can see more than the MD does. Second is that they are almost always specialized: an ER nurse, an oncology nurse, etc. So they develop expertise.

Neither of those are operative with a nurse reviewing records. I’d be super leery of a nurse as the front line in this situation.

like the reviewing doctor, the reviewing nurse should have a background in the specialty. maybe mental health is different, but there are lots of decent paying jobs for LCSWs approving/declining prior authorizations–no doctor involved, or if so, as here, in a fig leaf capacity

those of us who actually want to work on the front lines take a cut salary-wise

With all due respect to nurses, I don’t want a nurse making medical decisions for me. Medicine is enough of a medieval art as it is. Doctors are better trained and the better among them keep up on the research.

What bothers me on top of this is the parabolic escalation in salaries for these high level administrators, who apparently, now, do even less work. Prison, medical and educational industrial complexes nearly complete; now to the business of tearing them down.

How is this any different than Robo signing? Strikes me as the exact same practice only this time, the signer actually had professional credentials. So how common is this practice across the entire insurance industry?

I am sorry, but all the medical professionals expressing shock over this admission must have been being willfully ignorant for the last couple of decades (at least). I was told by a relative who worked the phones for one big insurer, that company policy was to deny clients coverage automatically until the third time they called…only then would you actually look at their policy. That was about 20 years ago. Apparently not much has changed.

It should have been (and let’s face it, was) obvious to anyone having to work with these companies that they don’t operate on the up-and-up. Look, one of them even admits it: “This is something that all of us have long suspected…” Indeed, then why is everyone so shocked to discover gambling in Casblanca? My theory is because it is far easier to ignore and deny the obvious corruption of a system, when you are being paid by that same system, than it is to own up to the fact that you’re part of a twisted, sick system, even if you personally would really like to “do the right thing.” Call it Lewis’s Law of Willful Ignorance.

So, good that this is finally out in the open, but what do you suppose the odds are that this will actually change how health insurers operate? Especially if healthcare professionals continue to display such naiveté? Fool me once, shame on you, fool me twice, shame on me. How many times do our good-hearted professionals (whether in health, finance, education, whatever) get to claim they’ve been blindsided by totally unforseeable fraud, before we insist they stop calling themselves professionals?…just sayin’.

We aren’t shocked. We are shocked at its public announcement. Many of us have suspected this is the case, but medical professionals cannot bring suit to these companies because we do not have standing. It also happens that if the medical professionals DO complain loudly, suddenly the practitioner is kicked off the insurance list and can no longer see patients – the out of network effect. Say what you may, but we are just as powerless as the patients even if we do suspect this type of wrongdoing. The insurance companies have the ALL the leverage – deny claims, kick MDs out of network, ally with PBMs to screw Independent Pharmacies.

Patients who are harmed by these decisions usually do not have the financial ability to bring suit to these companies, so to have this within public knowledge is EXTREMELY important. Out of all the insurance companies, Aetna and United HealthCare are probably the 2 well known insurance companies that deny these type of claims on a consistent basis. Kaiser, for all its faults, does have some sort of internal QC that prevents widespread denial of claims (I think).

You can point the fingers at us medical professionals, but individually we still have student loans to pay and a family to support. The entire system is rotten, and Neoliberalism does indeed have us by the balls, Hippocratic Oath be damned.

My first job out of school was as an insurance underwriter. We did not decide who got paid out but we certainly were aware of the standard policy of “deny, deny, deny…negotiate”.
Insurance is business in America. You can’t make lots of money if you have pay out on your contracts. You make money by taking in premiums and then not paying out. Duh! You don’t need an MBA for that.
And that is why I now live in France where, for all its faults, the insurance and healthcare systems are things that soothe me and lull me to sleep. Sleep tight, Americans!

It seems far more probable that Aetna had targets or incentives to reward medical directors for keeping approvals down as well as total output targets. Just like the mortgage servicing robosigners, medical directors like Iinuma may have been given so many cases to get done that there was no way to get through them without rubber stamping most of them. He may have been engaging in normal behavior, or not very far outside common practice.

I think it would be astonishing if this were not the common practice. From what I can tell after a recent hospital stay, the industry practice is just to deny as much as possible, hoping some fraction of those denied claims will ultimately just go away for one reason or another, perhaps because sick people and their families don’t have the time or energy to fight. Most of the denials I persistently contested were eventually paid, with no apparent justification for the switch.

The entire US financial industry seems to be one giant dumpster fire. I see little reason to give any firm or person the benefit of the doubt.

You are missing the distinction. There is a difference legally and in terms of the insurers’ costs, between “deny deny deny” when the doctor is expected to review the records and make sure that the denial is dimly plausible, versus just signing what a nurse has done. I am pretty sure most if not all states require an MD review.

In the late 1980s I worked for a small health insurance company here in Austin that was taken over by a big east coast health insurer. Their policy: “Look for any excuse to deny the claim upfront. If the insured appeals, then pay it.” I’d guess that only about 10% of the claimants bothered to appeal.

I did discover several instances of attempted fraud, both by providers and our claimants. One young couple altered 100 to 700 on their claim to us, and my supervisor went orgasmic on how “we were going to come down on them with the full force of the law!” Same for a local therapist submitting claims for patients he never saw.

Then I found a bogus claim for $2,500 from a big CA medical mill. I was looking forward to how the supe was gonna react to that amount of fraud. Her reaction: “Go ahead and pay the claim. That outfit has too much money and too many lawyers to make it worth our while to fight them; it would be more trouble than it’s worth.”

I was totally outraged and disgusted at the double standard of crushing the little fish while letting the big crooks walk. Needless to say, that was the last case of fraud I ever reported….

Our daughter has a severe case of Crohn’s disease. In a pre-surgery approval call with either Aetna or United, I don’t remember, including my wife and the surgeon’s patient advocate we were told that their policy is to deny all claims over a certain dollar amount and make you fight for it by a supervisor. All this hassle was occurring the day before major surgery. You know, we all have recreational colon resections.

If I was Aetna I’d be ripe with fear. While they can PR the idea it was a rogue Dr, it wouldn’t be all that hard to figure out if this was corporate wide or not. I would assume they are required to keep records for at least some period of time. I’d also assume the regulator would be able to demand copies. They could then see if the “rogue” Dr’s volume performance was radically better than his peers – I’d suspect not. They could also then readily come up with an estimate of how long a real review would take and then be able to understand if this is robo-signing or not. Unless they are destroying the evidence as we speak I can’t see how this isn’t proven out sooner or later.

They’re just making the entirely reasonable bet there will be zero personal consequences for anyone in charge, with the banking industry as Exhibit A. All politicians are bought, Congresspeople spend 4 hours a day begging rich people for money, the Supreme Court is packed with corporatists who believe money = speech, Trump’s in love with private equity pirateers and the Democrats are terrified an actual leftist will be elected somewhere. Unless We the People step in, nothing’s gonna change without a major systemic disaster or a similar level of violence.

In 2015 I was diagnosed with and treated for prostate cancer. BC/BS threw sand in my gears at every opportunity. My RadOnco consulting doc at Stanford ordered an endo-rectal coil MRI. A pre-auth reviewer BC/BS contractor doc in NJ denied it (not medically necessary”). Denial overturned on appeal, but the delay set me back a month. I’m just SURE he gave my case due consideration.

This is one reason I never complain about the cost of living in high-tax NY. I have a New York medical policy and I have the right to external appeal. For urgent cases, the state turns around the appeal in 3 days. Ordinary reviews take three to four weeks. My experience is the MDs working for NYS like to throw the book at the insurers.

Another reason why the $69 billion merger between CVS Health (the country’s largest pharmacy and owner of 2nd largest Pharmacy Benefit Manager CVS Caremark) and Aetna (one of the largest national health insurers) must be stopped!

Since 12/7/16, AMAZON.COM.INDC LLC has been licensed as a wholesale distributor of drugs in Oregon. And Oregon is at least one of 12 states to do so.

The claim is that the Aetna-CVS merger will would pass savings on to consumers. But surely this merger would use the same formula that existed between Anthem and Express Scripts to bilk the consumer. Last fall, a federal judge dismissed Anthem’s lawsuit against Express Scripts. Anthem claimed it was overcharged by $3 billion annually and sought an end to the companies’ 10-year contract. Subsequently, two health plan participants filed a class action lawsuit against both Express Scripts Inc. and Anthem Inc., accusing them of breaching their ERISA fiduciary duties that caused plan participants to overpay as much as $15 Billion for benefits.

Why is financial engineering in the health care industry protected as a trade secret?

With AI making security trades, or denying insurance coverage … there is nobody to sue. The ultimate corporation is one that not only has no liability in practice, but no liability in theory. End corporations in favor of partnerships or proprietorships, with full liability for management. This kind of thing has been going on since the British East Indies Company.

… Except the East India Company was an honest pirate enterprise in the sense that there was ‘Skin in the game’. It was well understood that if a young, enterprising, man of no particular social standing wanted to make something of himself in the colonies and come back and marry an estate, he’d have a good 40% chance of dying from a tropical disease or getting speared in the gut by some uppity ‘wogs’ well before making his fortune.

To become ‘management’ or rich via the EIC one had to take great personal risks. Whereas today, we have third and forth generations of useless flunkies being elevated to the highest positions of power with not even a mediocre personal effort being made in getting there and in addition protected from their own stupidity and corruption forever after, reinforcing straight-up rotten behaviour.

Physicians lost control of their profession when they first started saying “I’m sorry, but we can’t see you if you don’t have insurance”

I think back quite often to the late 80’s when the pharmacist for the small Idaho town I was living in closed shop for the day to go testify in Boise AGAINST insurance reimbursement for drug bills. His point, succinctly stated I thought, was “If having a 3rd party pay your professional fees was a good idea, LAWYERS WOULD DO IT.”

>>>Just thank goodness we don’t have Gumint Death Panels deciding these things.<<<

Don't be silly. We do have death panels.

Taxes are theft don't you know, so…

The process of getting on Supplemental Security Income (SSI), or especially Social Security Disability Insurance (SSDI) and mostly free access to medical care, often takes years, often involves multiple levels of appeals, reams of medical records, repeated tests, court appearance(s), and a lawyer. Further, if applying for SSDI, you cannot be working at all as that means an automatic denying of your claim. It is the most common reason for denial, and the “work” can be babysitting one night a week. Any income from wages whatsoever.

Granted, not everyone is denied at first, and the multiyear back payment can be significant, but surviving being destitute, with often great difficulties keeping all the records, keeping track of multiple appears(and multiple offices) making multiple phone calls, and letters, and going to whatever appointments in whatever county that is not your county can be… problematic let us say. Especially for one who really is disabled. Or has no family, or is taking care of family even worse off than they.

So some of those often homeless people who obviously qualify for something even with our tattered net, effectively cannot get it.

Isn’t great to be an American? Or a Californian? Richest state in the richest country in the history of the world, my fricking posterior.

So yes, we have the same fecal matter in the public system as we do in the private. Maybe not as bad, but both try to get the victim to die before getting help.

For those that think Single Payer equals death panels, this shows that we are almost their already plus a 30% overhead for lining executive and shareholder pockets. We all know republicans prefer their overlords to tell them they are going to screw them before they do, or else they’d vote democrat.

So I deduce that this will drive republicans to look favorably on single payer, even if they still believe it will have death panels, because at least they will be getting screwed to their face, rather than behind closed doors by private companies that charge 30% more for their services.

“During the deposition, the doctor said he was following Aetna’s training, in which nurses reviewed records and made recommendations to him.”

If Aetna is training their medical directors to deny claims based on nurse reviews, then it’s probably safe to assume that it’s a company-wide, and more likely industry-wide, practice.

As I’ve said repeatedly and consistently for decades, insurance is a scam. It’s the corporate version of paying protection money to the mob to keep your store safe only to have it burned down anyway. It has no place in modern society and we need to come together to put a stop to the practice in a such a way as to prevent the con artists from ever starting it up again. And no, killing it with fire won’t work because they would just gather up the ashes, drip their blood into the pile while chanting the ancient curse to reactivate it and make us all suffer the consequences!

Thanks for catching that. So Aetna’s gone all legalistic and intends to attack the deposition, as in say his characterization of the training was false, as if that’s the real issue, as opposed to what happens in practice and Aetna’s knowledge and encouragement of it. Help me.